Greed and Need

I see this every day – there are too many people in this world who hate successful people and their resultant wealth. Its one of the oldest sins in the book – envy, or hate, or jealousy. Because they know that it is a dirty emotion, such people will rationalize their hate. And the financial crisis is a golden opportunity to bitch about every single person who is “rich” regardless of “how” he got rich. The people who are spared are those who are willing to give away their wealth – people like Bill Gates, and Warren Buffett. They are good “because” they “give.”

Note that the target is not the fraudulent behavior per se – that would be understandable, but the “men who earn millions” who also indulged in such behavior; that’s why the hatred for bankers, financiers and the private sector as a whole with the real thugs – politicians – leading the lynch mob. Intellectual honesty would demand that the angry mob recognize that the biggest Ponzi schemes are run by governments around the world, and that they steal more money from people in the form of taxation – both openly (direct and indirect taxes) and by stealth (inflation is a hidden tax on your money) – in a year than all the Madoffs put together do in their lifetimes. But mobs, by definition, have no brains.

The Times of India carried a column by Timothy Egan writing for the NYT – “Greed and Need”

I was thinking of the Ponzi scheme thief [Madoff] and his cellar mates in the dungeon of truly awful rich people – Ken Lay, late of Enron and this world, and Leona “Only the Little People Pay Taxes” Helmsley – while working up a froth of good cheer over some other tycoons.

Bill Gates Sr. is 83 years old, six-foot-seven inches tall, with the kind of thin-haired crown that newborn babies and older men have in common. Though he looks like an avuncular conductor of a giant toy train set, he labors daily trying to give away one of the world’s biggest fortunes, that made by his son at Microsoft.

[…]

In the political realm, he is best known for fighting George W. Bush’s efforts to repeal the estate tax, a tax he feels is needed to prevent a permanent economic aristocracy in this country. If you need a moment of instant populist outrage, imagine all those children of people who made billions in the casino of credit default swaps passing on the gains to their little darlings, tax-free.

[…]

Warren Buffett, who until the recent meltdown was the world’s richest man (Bill Gates is tops again), is a fellow far-sighted traveler, who has pledged the bulk of his fortune to senior’s care at the Bill and Melinda Gates Foundation – the world’s largest philanthropy.

[…]

She lived alone in a one-bedroom apartment, quietly giving away more than $100 million.

But she protested when I suggested that her generosity was a way to return wealth made by her mother. “I don’t give back,” she said. “I give forward.

The moral of the story – if you want our good will, “buy” it from us , and we will shower you with praises, and call you “far-sighted”; because if you don’t, its clear as daylight that you are an evil, selfish, self-indulgent, b*****d intent on stealing money from grandmothers.

When Maira began his irritating and downright stupid writings on the failure of capitalism, I defended both Gates and Buffett. But there is no point trying to save a man who is hell bent on committing suicide, is there?

Gates Sr. is for the estate tax – he is afraid of a “permanent economic aristocracy.” The tax takes away the right of those who earn wealth to decide who they want to leave it to, or at least allows the government a significant say in who the beneficiaries of the wealth will be. And this is “good” because it “spreads the wealth around.” Does he know what wealth is, or at least how it grows? Or why an economic aristocracy cannot exist, at least in a free market where protectionism doesn’t save incumbents and their wealth and the only way to maintain the “aristocracy” is by continuously reinventing oneself and meeting the requirements of customers? I think not.

CNBC carried an interview with Buffett the other day. He said that any tax breaks that “help” him (and people earning in millions) are not helpful. Help those who need it, he said. There is nothing wrong with reducing taxes on a majority of people, but something is wrong if a minuscule minority pays for the upkeep of the majority. The compulsory progressive taxation system that is followed by most countries in the world – the tax on income – is not based on the principle that regular business transactions follow – exchange of value. It is based on a simple premise – he who earns more pays more. Why? Because he earns more – meaning in most cases – that the market is willing to pay him top dollar for his abilities. So, in effect it is a tax on your ability. The system thus punishes success and rewards failure (the dole for the unemployed is a good example).

Two Ayn Rand pieces are very relevant here. The first is “The Age of Envy” from Return of the Primitive where she tears into the people I mentioned, and their mentality. Among other things, she writes about the war against success-

A noted economist proposed the establishment of a tax on personal ability, suggesting that “a modest first step might be a special tax on persons with high academic scores.” What would this do to the talented, purposeful young people who are barely able to make a living while working their way through school? Would they be able to pay a tax for the privilege of using their intelligence? Who—rich or poor—would want to use his intelligence in such conditions?

The economist she refers to is Jan Tinbergen, the first winner of the “Economics Nobel.” This crook proposed a lump sum “capability tax.” Couldn’t find much on his idea online except this. Good riddance.

The second piece is Francisco D’Anconia’s famous “Money speech” in Atlas Shrugged. These sections particularly-

But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made—before it can be looted or mooched—made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.

[…]

Only the man who does not need it, is fit to inherit wealth—the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue that was the fortune. Money is a living power that dies without its root. Money will not serve the mind that cannot match it.

—-

From a Mises article

Last weekend, Harvard University sponsored a conference called (I am not making this up) “The Free Market Mindset: History, Psychology, and Consequences.” Its purpose was to try to figure out why, since everyone knows the current crisis amounts to a failure of the market economy, the stupid rubes continue to believe in it. The promotional literature for the conference opened with That Quotation from Alan Greenspan — the one in which he suggested that there was, after all, a “flaw” in the free market he hadn’t noticed before.

Well, that does it, then! If our Soviet commissar in charge of money and interest rates says the free market doesn’t work, who are you to disagree?

The promotional material continues:

If the current state of the U.S. economy makes clear that former Federal Reserve Chairman Alan Greenspan’s faith in free markets was misplaced, the question remains: what was it about free markets that proved — and still continues to prove — so alluring to economists, scholars, and policy-makers alike?

Because, of course, if there’s one guiding principle behind the largest government in world history, it’s free markets. Ahem.

Why would intellectuals in major universities be so unsympathetic to free markets? One reason is that they don’t like freedom – egalitarianism and the “central planner” rulez! The other reason is that they don’t know better. Their answer to a “why” is “we have always done it like this.”


“I am the man whom you did not want either to live or to die. You did not want me to live, because you were afraid of knowing that I carried the responsibility you dropped and that your lives depended upon me; you did not want me to die, because you knew it.” — John Galt

The crisis has renewed interest in Rand’s writings, and the move to raise taxes on the highest earners is making people consider “Going Galt.” Predictably, the response to such a “threat” is “you think you are that important? we don’t need you.” Read what Ed Cline has to say on the subject. There is one person who has done it – Shrugged. He did it over 40 years ago, and has also written a book on the whole philosophy. Read it here. [Note: I have committed some blunders in the past, linking to people I shouldn’t have linked to, and have regretted it later on. To clarify, as of now, the only chapters I have read are 11, 12, 13, 1 and some part of 2, and there isn’t too much I disagree with in them.] He says-

After I had thought about Atlas Shrugged for a while, I realized that Shrugging is appropriate not just to someone at or near Galt’s level of productive capability, but to anyone who is concerned with the ethical propriety of his life. I believe that even though there are immense differences between Galt and a track walker, they are differences merely in quantity, not in quality. Thus Mr. Walker may well have just as legitimate a concern for the ethical nature of his behavior as Galt has for his. When I contemplated the question “If Galt steps down to the level of the track walker, what would the track walker step down to?” I identified this as the essence of Shrugging: do not pay tax on your creative ability. I believe that every person has some creative capacity, and that the proper way to respond to government is to deny it the benefit of that creativity. As Rand observed: “Physical labor as such can extend no further than the range of the moment. The man who does no more than physical labor, consumes the material value-equivalent of his own contribution to the process of production, and leaves no further value….”

Rand herself talked about it (she didn’t support “Shrugging”), calling it the “sanction of the victim”

Then I saw what was wrong with the world, I saw what destroyed men and nations, and where the battle for life had to be fought. I saw that the enemy was an inverted morality—and that my sanction was its only power. I saw that evil was impotent—that evil was the irrational, the blind, the anti-real—and that the only weapon of its triumph was the willingness of the good to serve it. Just as the parasites around me were proclaiming their helpless dependence on my mind and were expecting me voluntarily to accept a slavery they had no power to enforce, just as they were counting on my self-immolation to provide them with the means of their plan—so throughout the world and throughout men’s history, in every version and form, from the extortions of loafing relatives to the atrocities of collectivized countries, it is the good, the able, the men of reason, who act as their own destroyers, who transfuse to evil the blood of their virtue and let evil transmit to them the poison of destruction, thus gaining for evil the power of survival, and for their own values—the impotence of death. I saw that there comes a point, in the defeat of any man of virtue, when his own consent is needed for evil to win—and that no manner of injury done to him by others can succeed if he chooses to withhold his consent. I saw that I could put an end to your outrages by pronouncing a single word in my mind. I pronounced it. The word was “No.”

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Comments

  • you12  On March 18, 2009 at 8:18 pm

    I think political correctness does play its part.Absurd ideas like equality are the norm and successful people have to remain in the civil society.

    May be we should ask Harvard to do what it preaches,give everyone admissions and spread the grades around.

    • Aristotle The Geek  On March 18, 2009 at 11:56 pm

      “successful people have to remain in the civil society.”
      Depends on the kind of successful people. The “norm” is perverse and has to change. But if we keep waiting for the world to change, nothing will happen. Read chapters 1 and 13 from this book – he withdrew, just like Galt, and the thing is – I don’t think it is a crazy idea at all.

  • wgreen  On March 19, 2009 at 1:28 am

    I always cringe when people talk about the rich “giving back to society”. If they have earned their money legitimately, they owe us nothing. if anything, we owe them.

    E. J. Dionne recently exemplified this when wrote an Op Ed in which he said we need a “fairer distribution of capitalism’s bounty.” It is as if he thinks that just by being a consumer he has contributed to “capitalism’s bounty”.

    • Aristotle The Geek  On March 19, 2009 at 9:42 pm

      Such people don’t understand the nature of the “bounty” – its as if all the wealth was lying on a beach somewhere and the producers just happened to be at the right place at the right time.

      People like Buffett make things worse – those who have earned wealth on the basis of their own effort shouldn’t use terms like “giving back to society” because it implies that they “took something from ‘society'” to reach where they are today.

      That’s why charity is a dangerous business – if you are not clear in your mind, or in your words, about why you are doing it, sooner or later a societal “claim” will emerge and “voluntary” will become “mandatory”.

  • wisdom  On March 19, 2009 at 9:04 pm

    There is no wealth in (money) wealth and no wealth in greed.

    They are emotive goals when all they produce is more of the same (old same old).

    Real wealth is when you go beyond the need of it.

  • yet_another_hindu_infidel  On March 22, 2009 at 1:27 pm

    perhaps charity be considered an investment in goodwill?

    • Aristotle The Geek  On March 22, 2009 at 5:55 pm

      Of what use is the goodwill of people who mentally kill you every time they watch you drive by in your BMW?

      Unless YOU feel good because of charity – you do it for a purpose that satisfies you – its pointless. You can’t buy the goodwill of thieves and murderers – that’s called paying a ransom, or protection money.

  • yet_another_hindu_infidel  On March 22, 2009 at 7:23 pm

    you do it for a purpose that satisfies you – its pointless.
    really? then why do you think salman khan suddenly began halting at ashrams and disabled kids centres after that poaching incident case? why do you think sanjay dutt started lecturing gandhism when just a few years ago he had brutally ridiculed the gandhian concept?

    your right when you say you do it for a purpose that satisfies you. that case no. 1

    the other case why you do it is because you know your robbing someone with his pants down. the guilt makes you do it. you see homeless people on the street and you know then and there that the entire system is flawed. bill gates history isn’t exactly clean. warren buffet and the similar prophets of profit can go to hell also.

    • Aristotle The Geek  On March 22, 2009 at 7:56 pm

      I don’t care why others do it; am only pointing out what kind of charity is the “right” kind.

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